The Role Of Natural Gas In Energy Independence

India is the world’s fourth largest consumer of energy and has set its sights on energy independence by 2030. Energy independence is necessary to provide access to those 300+ million Indians, living without power today. This ambitious target looks dubious, given the fact that India imports 80% of its crude oil requirements and more than 80% of its electricity generation plants are dependent either on oil or coal. A big shift towards indigenous resource production along with a gradual reduction in import dependence is required to achieve this tall order. Energy consumption will continue to grow on the back of a growing manufacturing sector and modernisation programmes.

So, India needs more than renewables to meet the rising demand. In such a situation, the thrust on indigenous exploration and production of natural gas is important. Historically, natural gas has been significantly cheaper than other fuels like motor spirit, naphtha, diesel, low sulphur heavy stock and furnace oil. Also, natural gas has become the preferred fuel for fertilisers, petrochemicals and has even found a place in power generation. To achieve energy independence, it is necessary to increase the share of natural gas in the primary energy mix from about 9% in 2014 to 20% by 2030 or even more.

In the meanwhile, India needs to reduce dependence on oil. In the US, new extraction technologies have revitalised wells that were considered inactive, resulting in a shale gas and oil boom. According to the BP 2014 statistical world energy review, natural gas production has grown more than 20% over the past five years, touching an all-time high of 328 billion cubic feet per day. However, one of the key factors for liberalisation of natural gas markets in the US is its robust pipeline network to deliver gas at competitive rates across the country. India can emulate the US model. However, more is needed from the government in the form of support through progressive policies – from tax systems to pricing mechanisms, which could be enablers for gas discoveries through exploration. India will have to effectively utilise energy reserves and strike a balance between demand and supply to become energy independent by 2030.

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